By the Numbers: ARM

A leaderboard showing the top Two-Brain gyms' average revenue per member.

What if every member at your gym paid you $205 per month?

How would that average revenue per member (ARM) affect your profitability?

Would that solidify your business?

Would it allow you to focus more on the clients you have instead of spending time trolling for more?

Would it allow you to keep your business open longer?

The data says yes.

Target No. 1: $205

The top 10 percent percent of gyms in our State of the Industry data set earn at least $205 per member per month. The average Two-Brain gym is close ($176 per month—but most microgyms are a long way away (less than $100 per member per month).

That means most microgyms need twice as many members to make the same revenue as the top gyms. But with twice as many members, they also need a lot more space and staff, and other expenses increase as well.

In other words, it takes most microgym owners 250 clients to make the same income as a Two-Brain gym with 100 clients.

Worse, gyms with over 150 clients are almost always the gyms with the worst retention rates, especially during periods of lockdown. It’s an extremely fragile model.

In this series, we’re going to tell you how to increase your ARM. The leaderboard above shows you what the top gyms in Two-Brain scored in ARM in December 2020, and I’m going to show you how they got there.

But you need to know this: They all started where you are right now. All of them had underpriced services, and all of them doubted their clients would pay more if they created more value. All of them, happily, have now seen the reality: If you create more value, you’ll make a greater impact for everyone.

You’re going to hear about additional services and high-value hybrid coaching models in this series. But if you’re ready to do the math, start with this:

A graphic uses dollar signs to show that a gym's primary revenue stream makes up 70 percent of gross.
  • 70 percent of your revenue should come from group training.
  • 20 percent of your revenue should come from personalized services (personal training or nutrition coaching).
  • 10 percent of your revenue should come from everything else—retail, events and online coaching (though the latter is quickly growing!).

Take the $205 per month average and spread it across the bell curve of clients in your business. Then ask, “What service can I sell that is worth $205 per month?”

$205 ARM isn’t the right target for everyone. But it’s probably the first target for most gyms. In this series, I’m going to tell you how to build a service worth $205 per month—and more!

Other Media in This Series

“Nutrition Challenges Are Dead. Kickstarts Are the Answer”
“How to Run Specialty Courses Every Day of the Year”

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